18
Answer. Between 1912 and 1951, when the Panama Canal was operated as an ap-
propriated fund agency of the United States Government, marine accidents were ac-
counted for by charging the cost of each ship accident directly to expense as the
accident occurred. The actual payment of the claim was made from the appropri-
ated funds of the Agency at an amount agreed to between the Agency and the ship-
owner (or his agent). If the case was litigated, payment was made at the amount of
judgement awarded by the United States Court.
From 1940 through 1950, the Agency's liability for settlement of accidents which
occurred outside the locks was limited to $60,000 per ship, per accident. Claims in
excess of $60,000 were to be submitted to Congress for adjudication and payment.
Canal records indicate that no claims were ever submitted to the Congress under
this provision-apparently because no claims of that magnitude were ever received.
In fact, it wasn't until the late 1970's, as vessels became increasingly larger and
more sophisticated, that marine accident costs, both on a per accident and overall
basis, became significant dollarwise. For example, marine accident costs over the 20-
year period frQm 1952 to 1971 averaged only $164,000 per year and $6,300 per acci-
dent. For the two year period 1980 to 1981, marine accident costs averaged
$10,400,000 per year and $220,000 per accident. it is because of this sharp price dif-
ferential that it became necessary to adopt the present reserve method of account-
ing for marine accidents.
Question 6. In your opinion, would eliminating canal pilots or changing them to
only an advisory role make canal transits less safe? If your answer is yes, to what
extent, if any, does the vessel master's superior knowledge of the way his vessel
handles offset the danger of having the canal pilots in only an advisory role?
Answer. Eliminating canal pilots from transiting ships totally, or changing their
status to advisory, would be extremely detrimental to the safe passage of ships
through the waterway. That is, Commission pilots are in absolute control of transit-
ing vessels of all descriptions and handling characteristics and are continuously
faced with the challenge of maneuvering those vessels in extremely restricted
waters within close proximity to the Canal banks, Locks structures, and to other
transiting vessels. To allow ship Masters, who are unfamiliar with Canal operations,
to have complete or partial control over the movement of their vessels in Canal
waters would increase the potential for serious marine accidents. It takes some 8/2
years of intensified training and experience on top of strenuous entrance require-
ments for a Canal Pilot to obtain full qualifications to handle any ship passing
through the Canal. Although Masters may have greater knowledge over their par-
ticular vessel, the majority of those Masters have little or no experience in handling
them in restricted waters. With regard to placing a Pilot in an advisory control
status, the Pilot would be subject to questions and/or improper actions on the part
of the Master, which could contribute to or cause a marine accident. In summary,
68 years of experience have proven that Control Pilots are far better suited for
moving vessels through the Canal, from both the customer's and the Commission's
viewpoint.
Question 7. Is there any difference between the way claims for damage inside the
locks and claims for damage outside the locks are investigated by the Board of Local
Inspectors and processed thereafter by the Commission? If so, what differences and
why?
Answer. There are no differences between the manner in which the Commission's
Board of Local Inspectors investigates vessel accidents occurring in the Canal locks
and the manner in which it investigates marine casualties occurring outside those
locks. For the procedures followed by the Board in the conduct of its investigations
of marine accidents occurring at the Canal, see Part 117 of Title 35, Code of Federal
Regulations. (Attached)
Claims presented to the Commission for damage sustained by a vessel in the
Canal locks are examined by the agency under section 1413 of Public Law 96-70.1
That statutory provision sets out the items of damage which the Commission may
pay and those which it may not, and contains the requirements regarding the shi-
power's responsibility to fully document its claim. When the total amount of the al-
lowable damages have been calculated, the agency's legal office examines the facts
surrounding the accident (relying largely upon the Board of Local Inspector's report
of investigations) to determine whether and to what extent the accident was caused
or contributed to by the negligence or fault of the vessel herself, or her master, crew
or passengers. (See section 1411, which makes the Commission a virtual insurer in
this type of vessel accident, except where such vessel fault has occurred.) The
damage award then offered to the shipowner is the amount of the allowable dam-
1 The remainder of the citations in this Answer are also to Public Law 96-70.